My UK Pensions should I stay or should I go now?
In June 2016, the UK citizens voted in a closely fought referendum to the leave the EU, by 52% for to 48% against. For those of us on this side of the Irish Sea, this was largely a surprise. Since this decision was reached there has been a constant dialogue of communication and discussion on what the implications of Brexit will be for Ireland. As I write this on the 2nd January 2018, the implications are still largely unknown.
Brexit is scheduled to take place in March 2019, which means that we in Ireland have a short period of time to ask ourselves the question – “How will Brexit affect me?”.
QROPS (Qualifying Recognised Overseas pension Scheme)
At present Irish residents who have a pension fund in the UK do have the option of leaving their benefits in their UK pension Arrangement OR transferring their UK pension benefits to a QROPS approved pension structure in Ireland. A QROPS approved structure is an overseas pension scheme that the UK Revenue (HMRC) recognise as eligible to receive transfers from registered schemes in the UK.
Why should I review my UK Pension Arrangement now if I live in Ireland?
- If you plan to live in Ireland or the European Economic Area you may want your pension fund to be in the currency of the country where you retire, so as you are not receiving a future income in pounds and spending in euros, as exchange rates fluctuate daily.
- It may be easier to keep abreast of tax and regulation changes in the country where you reside.
- If you are fortunate enough to have a pension fund in the UK approaching their Lifetime Limit of £1 million.
- Changes in Legislation – From March 2017 a number of changes were applied to transfers from UK Pension unless specific criteria were met. Brexit may bring further changes or restrictions on transfers to QROPS in the future.
At this juncture the key ingredient if you have a UK Pension Fund, is to get advice from a Qualified Financial Adviser who is experienced in this area. Every individual’s circumstances are different, every pension structure/fund is different and peoples current circumstances and future plans are different, therefore it is not appropriate to seek generic advice in this area.
The QROPS changes introduced by the UK in 2017 have now made it more difficult to move UK Pension Benefits Overseas. It is uncertain what Brexit will bring in March 2019 therefore those with existing UK Pension Benefits need to consider their options at this juncture, in the event that some options are no longer available post Brexit.
David Peavoy BA, QFA, LIAP is the Owner of Peavoy Financial Planning whose practice is based in Office 5b, Portlaoise Enterprise Centre, Clonminam Business Park, Portlaoise, Co Laois.
David Peavoy T/A Peavoy Financial Planning is regulated by the Central Bank of Ireland
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